Share!The US Treasury completed the settlement of its biggest slug of supply in a while on Thursday and Friday, and the markets yawned. Stocks saw minor pressure. Bonds were firm, as they have been for the past 2 weeks. Download this report to learn what may be behind that and what to look for in…

Share!Cycle screening measures strengthened on Friday, following through on the gains of this week. Under normal circumstances, when these measures strengthen against a down day in the market, it usually means the rally has further to go. However maybe this time is different. Download this report to view the charts, tables, and a succinct analysis…

Share!The market pulled back slightly on Friday, setting up a new potential short term downtrend channel. That channel should either be validated or broken early next week. Download this report to find out what needs to happen for clearer short term signals and why calling the intermediate and longer term trend is even more difficult.

Share!Withholding tax collections have weakened in July, breaking down from the narrow range of 5-6% annual nominal growth they had been in throughout the second quarter. The nominal growth rate declined to +2.4% this week, which is near or below zero growth in real terms, depending on what you believe the inflation rate to be.…

Share!Cycle screening measures strengthened on Thursday, following through on the earlier gains of this week and suggesting that the rally has further to go. However, the trading range has become so thin after so many crossings over a period of months that it is virtually frictionless. These indicators gave little forewarning of a turn at…

Four Ways to Play the “New Gold Rush” in Materials- Money Morning

This is a syndicated repost. The opinions expressed are those of Money Morning and the author, not those of the Wall Street Examiner. The Wall Street Examiner makes no representation regarding the accuracy or validity of the ideas expressed in the post. No recommendation or endorsement is intended or implied. This post is presented for informational purposes as representative of one of a range of views on the subject. Do all necessary due diligence before considering any investment.

Who would have thought that the new gold rush would be in material sciences?

We’re talking about everything from rare earths that drive precision lasers to the cobalt needed for rechargeable batteries

Not to mention the advanced materials that make computer chips run faster. Or the “smart” materials that are driving the nanotech revolution.

Of course the big news in what I call the Golden Age of Materials Science came less than nine years ago when two scientists discovered graphene.

It’s a revolutionary material that will yield flat-screen TVs as thin as Saran Wrap, nanotech supercomputers, and neural implants that combat brain disease. No wonder the two scientists who discovered it won the Nobel Prize.

Now hundreds of scientists have hit the lab to look for new ways to tweak existing molecules — or create whole new synthetic substances. They’ve already produced a steady stream of breakthroughs.

Today, I want to show you four ways you can profit from all of this radical change.

For most investors, that will mean focusing on the specialty chemicals sector, which is up about 22% in the past six months. That’s more than double the market’s overall move over the same the period.

Here are four material sciences stocks that have caught my eye thanks to their strong fundamentals and solid charts:

And the story of the “New PolyOne” certainly has excited investors. With a market cap of $1.9 billion, the stock is up some 50% in the past six months, roughly double the return of the sector as a whole.

Even better: the specialty chemicals company says it expects to expand sales by nearly 75% in the next four years to about $5 billion.

As much as any firm in the space, OM Group has worked hard to meet our changing material needs.

Indeed, back in 2007, the firm dumped a big play in basic resources when it sold off its nickel business. Since then, OMG has acquired firms that have given the company new entries in batteries, magnetics, and electronics.

As a result, OMG is profiting from the electronics revolution sweeping the world in the form of music players, smart phones and game consoles. That same wave also is lifting sales of materials for the rechargeable batteries needed to drive the devices.

OMG has a diverse list of clients. It serves 4,000 customers in 50 industries. It still ranks as the global leader in cobalt specialty materials, which the auto industry increasingly needs to make electric cars.

In all, its advanced materials units serve 15 markets. These include everything from printed circuit boards to diamond tools to synthetic fibers and thermal sprays.

Recently trading at around $27, OMG has a market cap of about $875 million. It sells at just 0.48 times sales and just 0.66 times book value. Over the past six months, the stock has gained nearly 75%.

If the name sounds familiar, it should. This global leader is a former unit of the bankrupt film firm Eastman Kodak. But the big-cap chemical company’s future is much brighter–it is a cash machine.

And despite what may be a weak fourth quarter, the firm expects to go on a future earnings tear. On a per-share basis, the firm expects earnings to rise to about $8 by 2015, a roughly 50% increase in three years.

Meantime, the chemical goods company took a much higher profile about a year ago when it agreed to buy the specialty firm Solutia Inc. Among other things, Solutia makes materials that protect thin-film solar panels against damage, and that reduces glare and improves the performance of computer touch screens.

With a market cap of roughly $11 billion, the stock trades at about $71 a share with a return on equity of 22.5%. The stock is up nearly 42% over the past six months and has an annual dividend of $1.20, which has increased three times in the last two years.

Of the all the stocks screened for this report, Hexcel is the only one not in the specialty chemicals sector.

Instead, this mid-cap firm specializes in composite materials. In particular, Hexcel is known for carbon-fiber products as well as its unique “honeycomb” design that provides high strength with little added weight.

Hexcel is a favored supplier to the aerospace industry. Its honeycomb products provide acoustic damping for engines so that jetliners can take off and land with reduced noise, but no added weight. The firm’s products also are used in helicopters, satellites and military aircraft.

The company is picking up business from the emerging wind power industry, where it ranks as a world leader in materials for the crucial turbine blades. And you’ll find Hexcel products used by car makers, ship builders and oil exploration firms.

With a market cap of $2.7 billion, the stock trades at around $27.50 with a PEG ratio of just 1.2. The company expects only modest growth this year. That may explain why its stock lags those of the specialty chemical sector over the past six months, racking up returns of about 10%.

Let me close by noting the pace of innovation will only get faster in what I call the Era of Radical Change.

Wall Street Examiner Disclaimer: The Wall Street Examiner reposts third party content with the permission of the publisher. I curate these posts on the basis of whether they represent an interesting and logical point of view, that may or may not agree with my own views. No promotional consideration has been offered or accepted. The opinions expressed in these reposts are not those of the Wall Street Examiner or Lee Adler and no endorsement of the content so provided is either expressed or implied by our posting the content. Some of the content includes the original publisher's promotional messages. The Wall Street Examiner is not familiar with the services offered and makes no endorsement or recommendation regarding them. Do your own due diligence when considering the offerings of third party providers.

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